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Economy and Finance

The euro as legal tender

Information on the euro's status as legal tender in the euro area and its practical use as a national currency. 

Official currency

The euro is the single currency shared by European Union countries that have adopted the euro. While Denmark does not participate through an 'opt out', other EU countries have not adopted the euro yet because the convergence criteria to join the euro are not met.

Official currencies, including the euro, consist in a monetary system designed and controlled by a state or, as regards the euro, by supranational structures.

Within the euro area, only the euro has the status of legal tender. Article 128 (1) TFEU lays down the legal tender status of euro banknotes, and article 11 of Regulation EC/974/98 does so with regard to euro coins. According to the Commission recommendation on the scope and effects of legal tender of euro cash (2010/191/EU) and as confirmed in a judgment by the European Court of Justice in January 2021, legal tender entails, in principle, the mandatory acceptance of cash, at full face value, with the power to discharge from a payment obligation. This means that the creditor is obliged, in principle, to accept a payment made in euro which subsequently discharges the debtor from his payment obligation. There can be exceptions to this principle of mandatory acceptance, for instance where the parties to a contract agree on another means of payment, or where a refusal of cash is made in good faith. Limits to cash payments are also possible for example to combat tax evasion and money laundering.

Legislative proposal on the legal tender of euro banknotes and coins

On the 28th of June 2023, the European Commission adopted a legislative proposal on the legal tender of euro banknotes and coins, to safeguard the role of Euro cash, which must be accepted as a means of payment everywhere in the EU and accessible for citizens and businesses.  This proposal codifies and clarifies the judgment by the European Court of Justice in January 2021 which sets out the principles of legal tender.

Digital Euro Legal Tender

In view of the establishment and potential issuance by the ECB of a digital euro with legal tender status, it is also important to regulate the meaning of legal tender for the existing physical form of the euro to ensure consistency among the two forms of public money. In addition, this proposal seeks to address issues concerning the acceptance of cash that have emerged, which can lead to difficulties for citizens wanting to pay in cash, as well as concerns which have been raised in a number of Member States about difficulties in accessing cash, such as closures of ATMs and bank branches. 

The main objective of the proposal is to safeguard euro cash as a means of payment, so that people will continue to be able to use it for their payments if they so wish. Indeed, although the use of cash has declined, the 2022 ECB SPACE study confirms that it still represents 59% of the number of retail payment transactions and 42% of the value of these transactions. 60% of European consumers consider it important to keep the option to pay by cash.

To achieve this, the proposal clarifies what legal tender means, and sets out the rules for the mandatory acceptance of euro cash and possible exceptions to it. In addition, it also sets out what Member States need to do in order to ensure that cash is widely accepted and that it can be easily accessed by its users.

28 JUNE 2023
Proposal for a regulation on the legal tender of euro coins and banknotes

Euro Legal Tender Experts Group (ELTEG)

ELTEG is a Commission expert group of Member States’ experts (national central banks and ministries of finance) and the European Central Bank (ECB) that meets annually. Its main purpose is to discuss euro cash acceptance and availability. In the ELTEG’s latest report of July 2022,  a range of issues of acceptance and availability of cash on the ground are identified, and its final report includes a set of 25 principles on the legal tender of cash which have been taken into account in the drafting of the legislative proposal on the legal tender of banknotes and coins.